NNN REIT: No Obvious Reason To Jump In Right Now

Summary

• The spread between the implied cap rate for the Nareit Free Standing subsector and the US 10-year Treasury has narrowed, indicating potential downward pricing pressure.
• NNN REIT's current deal flow pipeline is expected to come in at tighter spreads, implying less accretion to the bottom line.
• There is also an insufficient margin of safety between an unbiased measure of fair value and the total return picture for NNN.
• For these three reasons, we are reiterating our hold recommendation for NNN stock at the current quotation.

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Introduction and Previous Coverage

We last covered NNN REIT, Inc. (NYSE:NNN) in October and issued a hold recommendation on the stock at that time. In this article, we reiterate our hold recommendation for the stock and highlight three

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.